Factsheet for measure
DK-2020-11/624
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Updated
– measures in Denmark
Temporary compensation scheme for self-employed
Midlertidig kompensationsordning for selvstændige
Background information
The outbreak of corona virus has already had major financial consequences. Many self-employed people face major challenges, and this requires further initiatives. Therefore, has the government together with all the parties in the Parliament passed a new temporary compensation scheme for the self-employed.
The scheme for self-employed people was first introduced with the political agreement on 1 April 2020 targeting companies that lost revenue from 9 March through 8 June 2020. However, the scheme was partly reopened two times in December 2020, first with a new political agreement on 9 December 2020 due the introduction of new restrictions in 38 municipalities and secondly due the introduction of the restrictions in a total of 69 municipalities. Finally, on 15 December, it was decided to roll out the compensation scheme to the rest of Denmark, in total 98 municipalities.
To get compensation, the companies must apply for compensation on the Danish Commerce Agency's corporate portal for companies. The scheme is managed by the The Danish Business Authority.
The legal reference to the scheme is BEK nr 332 af 01/04/2020.
Content of measure
Self-employed, freelancers and other companies with a maximum of 10 full-time employees may receive temporary compensation for lost revenue due to COVID-19.
To apply for lost revenue compensation, it requires:
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Turnover or B-income has been at least DKK 10,000 per average. month before coronavirus / COVID-19.
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Maximum of ten full-time employees. This means, for example, a half-time employee equivalent to half a full-time employee, etc. The business owner and employee spouse do not count in the ten full-time employees.
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Have expected loss of at least 30% due to COVID-19.
With the first political agreement on April 2020, companies could apply for compensation for lost revenue in the period from 9 March through 8 June 2020. But with the new political agreement on December 2020, companies can again apply for compensation for lost revenue in the period from 9 December 2020 through 3 January 2021.
State compensation is 75% of the revenue loss, however, a maximum of DKK 23,000 per month corresponding to the rates in the salary compensation scheme for salaried employees agreed with the social partners in the tripartite agreement.
The compensation may amount to up to DKK 34,500 per month, if the self-employed has a spouse employed.
Self-employed or small businesses can receive maximum compensation for three months from 9 March until 9 June. It is a requirement that the company does not have more than 10 full-time employees.
Updates
The following updates to this measure have been made after it came into effect.
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09 December 2021
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The scheme was reintroduced in the period 1 December 2021 - 28 February 2022 due to a rise in infections and restrictions. Self-employed can as previously apply for 90% of lost revenue with a max of 30,000 (no employees) or 33,000 (with employees). Freelancers can also apply for compensation for 90% of the lost revenue, however, a maximum of DKK 23,000 per month for freelancers with B-income and DKK 20,000 per month for freelancers with mixed income. Self-employed who have been forced to close without turnover can also apply, and here compensation is given for 100% of the turnover loss.
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09 February 2021
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The government increased the maximum monthly compensation for self-employed from DKK 23,000 to DKK 33,000 for those with employees and to DKK 30,000 for other self-employed. A preliminary condition to receive the compensation is to commit to an solemn declaration to a maximum withdrawal of DKK 23,000 from the business a month in the effective period.
Further, the monthly turnover or B-income before the pandemic has been decreased from DKK 10,000 to DKK 8,000 in order to accompany more businesses. Both changes are with effect from 9 December 2020. The compensation scheme is stated to end on 28 February 2021.
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11 January 2021
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The scheme for self-employed people was first introduced with the political agreement on 1 April 2020 targeting companies that lost revenue from 9 March through 8 June 2020. However, the scheme was partly reopened two times in December 2020, first with a new political agreement on 9 December 2020 due the introduction of new restrictions in 38 municipalities and secondly due the introduction of the restrictions in a total of 69 municipalities. Finally, on 15 December, it was decided to roll out the compensation scheme to the rest of Denmark, in total 98 municipalities.
With the first political agreement on April 2020, companies could apply for compensation for lost revenue in the period from 9 March through 8 June 2020. But with the new political agreement on December 2020, companies can again apply for compensation for lost revenue in the period from 9 December 2020 through 3 January 2021.
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28 August 2020
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On 28 August the government decided to prolong the measure for self-employed and freelancers including artists until 31 October 2020.
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10 July 2020
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On 18 April, the temporary compensation scheme for self-employed and freelancers was extended for one month to apply from 9 March 2020 to 8 July 2020. The scheme has furthermore been extended until 8 August 2020.
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Use of measure
The Danish Business Authority (Erhvervsstyrelsen) regularly updates a webpage with information on the numbers of the different compensation schemes. As of the 3 January 2022 the numbers from the compensation scheme for self-employed are:
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Approved applications (unique): 198,188
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Number of companies (unique): 80,236
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Compensated employees (unique): 88,287
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Total compensation paid: DKK 11,032,050,226 (approx. €1.482 million).
Target groups
Actors and funding
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Actors
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Funding
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National government
Employers' organisations
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National funds
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Social partners
Social partners' role in
designing the measure
and form of involvement:
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Trade unions
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Employers' organisations
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Role
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No involvement
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Consulted
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Form
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Not applicable
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Direct consultation outside a formal body
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Social partners' role in the
implementation, monitoring and assessment phase:
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No involvement
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Main level of involvement: Unknown
Involvement
The compensation scheme for self-employed persons was not adopted in a tripartite negotiation between the employer organisations, labour organisations and the Government. Instead, it was adopted by the Government and a large majority of the parties in the Parliament. However, the business and industry organisation were involved in the preparation of the scheme in the form of consultation processes. These consultation processes are not public.
Views and reactions
Unknown.
Sources
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27 March 2020: National measures to protect non-standard workers including workers in the platform economy
(www.etuc.org)
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15 April 2020: BEK nr 332 af 01/04/2020
(www.retsinformation.dk)
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15 April 2020: Midlertidig kompensation for selvstændige som følge af coronavirus/covid-19
(indberet.virk.dk)
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08 June 2020: BEK nr 797 af 08/06/2020
(www.retsinformation.dk)
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07 January 2021: Agreement on reopening of the scheme
(em.dk)
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09 February 2021: Yderligere forbedringer af hjælpepakkerne for ikke mindst de mindre erhvervsdrivende
(em.dk)
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17 March 2021: Statistik for kompensationsordninger
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12 October 2021: Statistics for compensation schemes
(erhvervsstyrelsen.dk)
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09 December 2021: Aftale om genåbning af de generelle kompensationsordninger
(em.dk)
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22 December 2021: Nu åbnes kompensationsordningerne for selvstændige mv., samt lønkompensation
(em.dk)
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03 January 2022: Statistics for compensation schemes - self-employed
(erhvervsstyrelsen.dk)
